Hedge Accounting under IAS 39 and IFRS 9 - Dissertation Example

Download file to see previous pages These sections are divided into four chapters with a summary of findings, conclusions, and recommendations making the fifth and final chapters respectively. The study will seek to clearly address the differences between IFRS 9 and IAS 39 with proper insights on what changes, the adoption of IFRS 9 will bring to the financial industry upon full adoption. What makes IFRS 9 more preferred to IAS 39 will also be investigated. The study will employ the triangulation method of research by sampling qualitative and qualitative aspects in a complimentary manner. Triangulation will be most appropriate because the combination of qualitative and quantitative elements helps in determining the extent to which the two, arrive at common findings. The participants in this study will be Hedge Fund managers within the United Kingdom (UK) who are both professionals and industry players, making them the most suitable population for completing questionnaires and answering interview questions.

From the developed research questions, data will be collected through questionnaires and semi-structured interviews to help obtain an in-depth understanding of the differences between IFRS 9 and IAS 39 from the Hedge Fund managers’ point of view. Analysis of the findings will be done and conclusions drawn with accompanying recommendations.

CHAPTER 1: INTRODUCTION
The evolution of international unified rules for financial reporting from IAS 39 to IFRS 9 financial instruments, generally involved three main phases; classification and measurement, impairment methodology, and hedge accounting. The release of the Exposure Draft (ED) in December 2010 was the last and final phase of the evolution process that served to reduce complexity, thereby enabling additional entities to apply hedge accounting. Multiple rules were modified and concepts of rebalancing that now invoke a principle-based approach to hedge accounting were introduced. By assessing key changes from varying viewpoints, the study critically compares hedge accounting before and after the release of the Exposure Draft (ED). Key aspects such as the alignment of hedge accounting to risk management activities, the effectiveness of the old and the new systems with regards to hedge ratios and hedge efficiency, implications of changes, current issues and regulations, and future development for IFRS 9 (MIRZA, 2010).

Definition and Background Information
Hedge accounting is a technique utilized in accounting where entries for the rights of security and the opposing hedge are treated simultaneously. ...Download file to see next pages Read More